7th Pay Commission: Final report on allowances in next few days, maximum HRA likely to be Rs 60,000

At the highest level of the pay scale, the Cabinet Secretary and officers of the same rank have a new basic pay of Rs 2.5 lakh per month, for which the HRA would be Rs 60,000, meaning a hike of 122 percent.

New Delhi: The Narendra Modi government is likely to bring some good news for over 47 lakh central government employees and 53 lakh pensioners by making a formal announcement on the revised structure for allowances under the Seventh Pay Commission in next few days.

As per media reports, the committee on allowances will submit its final report on Thursday (April 27), when the Finance Minister Arun Jaitley returns to the country after his visit to US and Russia.

The allowances form a sizeable amount of the salary drawn by a government employee.

The committee on allowances headed by Finance Secretary Ashok Lavasa that was set up to review the recommendations of the Seventh Pay Commission is understood to have finalised its report.

The 7th Pay Commission had earlier proposed the rate of House Rent Allowance (HRA) at 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

The Commission had also recommended that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

The existing rates of HRA for Class X, Y and Z cities and towns are 30 percent, 20 percent and 10 percent of Basic pay (pay in the pay band plus grade pay).

Population of City

DA above

Present

Proposed

50%

100%

Above 50 lakh (Class X)

30%

24%

27%

30%

5 lakh to 50 lakh (Class Y)

20%

16%

18%

20%

Below 5 lakh (Class Z)

10%

8%

9%

10%

Assumingly, if the Committee accepts the bare recommendations of A K Mathur-led 7th Pay Commission then the HRA component of central government employees will increase ranging between 106 percent and 122 percent.

Take, for instance, a central government employee at the very bottom of the pay scale, where the basic pay (pay of pay band + grade pay) is now Rs 7,000, would currently be entitled to an HRA of Rs 2,100 in a Class X city. As per 7th Pay Commission, the new entry level pay at this level is Rs 18,000 per month against which the new HRA for a Class X city would be Rs 4,320 per month, that is 106 percent more than the existing level.

Similarly, at the highest level of the pay scale, the Cabinet Secretary and officers of the same rank have a basic pay of Rs 90,000, which means they are entitled to current HRA of Rs 27,000 in Class X towns. After the revised pay scale, the new basic pay is Rs 2.5 lakh, for which the HRA would be Rs 60,000, meaning a hike of 122 percent.

Existing Basic Pay (6th CPC)

HRA (6th CPC)

Proposed Entry Pay as per 7th CPC

Proposed HRA as per 7th CPC

Class X

Class Y

Class Z

Class X

Class Y

Class Z

7000

2100

1400

700

18000

4320

2880

1440

13500

4050

2700

1350

35400

8496

5664

2832

21000

6300

4200

2100

56100

13464

8976

4488

46100

13830

9220

4610

118500

28440

18960

9480

90000

27000

18000

9000

250000

60000

40000

20000

As far as Transport Allowance (TA) is concerned, Pay Commission had proposed no increase.